Cash Flow Analysishttps://survivalware.wordpress.com
Cash Flow Analysis - Key to Your Business SurvivalWed, 12 Apr 2017 02:52:38 +0000enhourly1http://wordpress.com/https://secure.gravatar.com/blavatar/7076ba59597841b0617abdaf37773175?s=96&d=https%3A%2F%2Fs2.wp.com%2Fi%2Fbuttonw-com.pngCash Flow Analysishttps://survivalware.wordpress.com
Real World Modeling drives SurvivalWare.NET developmenthttps://survivalware.wordpress.com/2016/01/15/real-world-modeling-drives-survivalware-net-development/
https://survivalware.wordpress.com/2016/01/15/real-world-modeling-drives-survivalware-net-development/#commentsFri, 15 Jan 2016 15:44:56 +0000http://survivalware.wordpress.com/?p=983]]>It’s hard to take the time to communicate when in the midst of a huge development effort. My New Year’s resolution is to give updates once a week, so herewith the first:
SurvivalWare.Net* is well under way. In addition to the standard Simple and Fort Knox models, we’ve actually got one customer model running under the new version. I find I hate going back to SurvivalWare 2015. If you’ve been to our website recently (apologies in advance if you have) you’ll notice that you can’t actually buy SurvivalWare off the website. We’re in the enviable position of not taking on new customers at the moment. Our focus is on this major technology conversion and product upgrade. We’re still actively supporting current customers and will provide additional software licenses to them as they need them. But we don’t anticipate taking on new customers until the second quarter of 2016 at the earliest.
There is still a lot to do. Our internal release date is April 2016 – but that could change based on the demands of a certain special client. Next week, I’ll go into more detail about what has been done, and what needs to be done to SurvivalWare.Net.
In the meantime, I have agreed to serve as interim Finance Director for this special client: a 40 person software company with a substantial customer base, and about to experience a spurt of growth. I’m just about done with their budget for 2016 and a highly customized projection model. Their business is complicated – a mixture of Cloud, Premise, and Lease customers – each with their own cash flow and profit profiles. The business is changing quickly, so we have decided to go with a 90 day rolling budget, and update every quarter.
For a software company, the biggest expense and strategic decisions really concern people. I decided early on to come up with an efficient way to forecast salary expense, and to react quickly to changing plans for new hires, terminations, raises, and departmental assignments.
Originally I decided to use the pay-master table exported from our payroll service provider to get the master list of employees, hire date (to determine date of next raise), annual salary, and departmental assignment. I wanted to use it “as is” with no human intervention to keep things efficient, and reduce the opportunity for error. But after the initial round of projections, and a poor attempt to cover new hires as lines in the model, I decided to use the pay-master file as the starting point and modify it slightly. I added new hires to the end, and expanded the number of fields to allow multiple raise dates, and tolerate Dollar Amounts, not just percentage increases. I also added a column for a Termination date – for expected terminations, and as a way to re-assign an employee from one department to another as of a certain date.
I also decided to put in a column for FTE count (set to 1.0 for a full-timer, or some fraction of 1 for a part-timer) instead of importing departmental FTEs from a separately maintained spreadsheet. We have at least one situation where an employee is split between two departments, so for expedience I just copied the employee info to a second line, and cut the salary in half, and set the FTE count to 0.5 for each department.
Going forward, this file will need to be manually maintained, but it shouldn’t be a huge burden – just a handful of changes each month. Also, it is good to force someone (like me) to scrutinize the list each month to make sure the forecast is accurate, and to keep an eye out for salary inequities.
There is an applet that reads this master file, and projects out the salary expense and FTEs by department for the rest of the current year, and for the 12 months of the following year. The applet takes about 30 seconds to run. At this point, 50% to 60% of the expense budget has been done.
It should all be downhill from here, but the devil is in the details. Coming up with a credible revenue forecast is really difficult. It’s going to take a lot of analysis to separate the “predictable” (e.g. monthly subscriptions, maintenance renewals) from the volatile (Premise Licenses, Annual Cloud subscriptions). There is the further complication of needing to defer revenue for Annual Maintenance Contracts, and Annual Cloud billings – and recognize the revenue over the life of the contract (usually one year).
The last 40% to 50% of expenses take some thought – especially for marketing, and technology upgrades. These are the two most discretionary spending categories.
As you have probably guessed, this is an “opportunity of a lifetime” for a financial modeling software developer like myself – to be thrust into the position of power user of my own software in a real world setting. I get to feel the pressures firsthand, experience the challenge of continuing to provide accurate information while building out a series of analysis and planning models, that seem to constantly change. I shudder at the thought of having to do it in spreadsheets. I just don’t have that kind of patience. It wouldn’t be fun. I’d lose sleep worrying about the accuracy of the data I was providing.
Not that there haven’t been hiccups with SurvivalWare. It’s just that as I experience a pain point – or some clumsiness, or drudgery, or a propensity to make mistakes – it makes we think “what can I do to improve this?” or “what would make it less boring and more fun?”
What is shaping up is not just SurvivalWare.NET, converted to a new technology platform. But rather a quantum leap in usefulness and usability – and “fun.” The CEO of my special client has said more than once – “How can anyone get by without this?!” This while we look at projections for 2016 and dug into the assumptions and trends. He is data-driven and loves to see things graphically (my bias as well). We have lively “GoToMeetings” that often raise more questions, and iteratively improve the model and the forecast. It is the process of model customization and continuous improvement that I am trying to get right with SurvivalWare.Net. I feel like I should be paying this client for the privilege, not the other way around.

* SurvivalWare.NET – a conversion of SurvivalWare from Visual Basic 6.0 to the Microsoft .NET platform and VB.Net. The project started in earnest in June, 2015. Models and data files from older versions of SurvivalWare can be used without modification under the new version. We’re hoping to release SurvivalWare.Net in Q2, 2016.

]]>https://survivalware.wordpress.com/2016/01/15/real-world-modeling-drives-survivalware-net-development/feed/2survivalwareIntroducing SurvivalWare 2015https://survivalware.wordpress.com/2015/02/18/introducing-survivalware-2015/
https://survivalware.wordpress.com/2015/02/18/introducing-survivalware-2015/#commentsWed, 18 Feb 2015 18:57:23 +0000http://survivalware.wordpress.com/?p=980]]>The latest and greatest version of SurvivalWare has just been released!

Thanks to all who attended the webinar, we hope you enjoyed it. For those who couldn’t make it, we put it online for you to watch and download. As always, contact us with any questions! 703-780-2044

]]>https://survivalware.wordpress.com/2015/02/18/introducing-survivalware-2015/feed/5survivalwareThe A-3 Targets Exercisehttps://survivalware.wordpress.com/2014/09/30/the-a-3-targets-exercise/
https://survivalware.wordpress.com/2014/09/30/the-a-3-targets-exercise/#respondTue, 30 Sep 2014 11:30:33 +0000http://survivalware.wordpress.com/?p=972]]>The A-3 Targets exercise is a great way to bring some discipline to your financial planning function. A-3 is short for “Annual” and “3 Months”.

I’m excited to announce a brand new, free webinar on the power of financial forecasting. You will learn how to use financial forecasts and projections to enhance confidence, credibility and trust with everyone interested in (and invested in) the financial success of your company.

Creating the forward looking view of financial performance is a surprisingly effective way for entrepreneurs (and CFOs) to play a more strategic and vital role in the future of your organization.

Here’s what happens when you create clarity and insight using forecasts:

You discover the importance of identifying and focusing on the key drivers of financial performance

You avoid nasty surprises

You begin to view financial information as an effective decision-making tool

You begin paying closer attention to the financial statements(because they take on new meaning)

And not long after that, results start to improve. Profitability and cash flow begin to grow. And that puts a big smile on everyone’s face!

There’s never been a better time to take your game to the next level and jump into the exciting, rewarding and strategic aspects of helping build a business that wins financially.

And it all starts with becoming really good at financial forecasting.

Featuring..

Philip Campbell, author of the book Never Run Out of Cash, and the soon to be released book, Financial Forecasting for CFOs and Controllers, and Rusty Luhring, developer of SurvivalWare, will show you how to create a financial forecast you can trust… and how to avoid the single biggest mistake people make when creating a financial forecast or projection.

This webinar will help you tap into the unique and exciting benefits that financial forecasting can unlock for you, your CEO and your company as a whole.

]]>https://survivalware.wordpress.com/2014/09/26/financial-forecasting-webinar/feed/0survivalwareRCL-Front-of-house-100-by-100Philip CampbellPhiliplogoSmall Data, Big Resultshttps://survivalware.wordpress.com/2014/09/24/small-data-big-results/
https://survivalware.wordpress.com/2014/09/24/small-data-big-results/#commentsWed, 24 Sep 2014 12:05:27 +0000http://survivalware.wordpress.com/?p=954]]>It seems like you can’t turn around without reading yet another article about Big Data and how it is transforming our lives as business people and entrepreneurs. Big Data is everywhere: page views, visitors, clicks, eyeballs, cookies, the Twitter fire hose, cross referenced databases – you name it – we are inundated. A month or so ago there was an article in the Wall Street Journal about Data Scientists – the next Big Thing in occupations you wished you had gone into when you were first starting out. Companies are paying $200,000 to $300,000 a year for the privilege of employing these people to sift through mountains of data – overflowing warehouses of the stuff – to discern tiny shifts in consumer behavior that can translate into millions of dollars in sales if you get it right.

But first things first. You’ve got to make sure you are making money and creating cash flow. It doesn’t matter how good you get at mining data if you run out of cash in the process. If you haven’t done so already, read Philip Campbell’s classic book “Never Run Out of Cash.” He’s got a new one in the works on Financial Forecasting for CFOs and Controllers to help you turn financial analysis and forecasting into a strategic advantage for your company. We at SurvivalWare applaud Philip’s approach, and are determined to help you focus on the Right Data. Starting with a small amount of data – historical financial statements and a few key drivers – and combined with decent analysis and modeling – can produce big results. That’s right: small data, big results. SurvivalWare is a tool that can help make this happen.

]]>https://survivalware.wordpress.com/2014/09/24/small-data-big-results/feed/1survivalwareDrillDown – an essential tool for financial analysishttps://survivalware.wordpress.com/2014/07/08/drilldown-an-essential-tool-for-financial-analysis/
https://survivalware.wordpress.com/2014/07/08/drilldown-an-essential-tool-for-financial-analysis/#commentsTue, 08 Jul 2014 16:58:41 +0000http://survivalware.wordpress.com/?p=948]]>It’s true that you don’t really appreciate something until it is taken away from you. I experienced that earlier today with the DrillDown feature of SurvivalWare. I’m working with a new customer to automate the loading of financial data for 60 to 70 freestanding locations. We are using the Simple model as a first step, and as a result, each SurvivalWare line item has several accounts mapped to it. I am using this customer as a test case to improve the ability of SurvivalWare to accept financial data from sources other than QuickBooks. So in the course of fixing a “design feature” that would not allow the same account number to be used twice with different descriptions, I introduced a bug that had the impact of disabling the drilldown feature for these types of imports. At the same time, I was trying to validate and make sense of their data. It was IMPOSSIBLE to do without a working DrillDown.

I thought this would be a good opportunity to review the purpose and operation of the DrillDown feature in SurvivalWare. DrillDown is a term in data analysis that refers to finding the detail behind any data item. The idea is that you are “drilling down” into the data to find out what is underneath any particular number. Here is how it is supposed to work.

You click on any cell in the DataViewer to make it the “Focus Cell.” Then click on the “Drilldown” icon to show what the detail is behind that cell. Remember that there are two types of variables in SurvivalWare: INPUT and CALCULATED. If you are looking at an INPUT variable, a Drilldown in SurvivalWare shows the accounts from your accounting system that were mapped to that variable.

If you are looking at a CALCULATED variable, the Drilldown will show you the variables used in the calculation. These should be the same variables that show up in the Formula Bar – but along with the month by month values for each variable, not just the logic.

So back to the bug – I did roll up my sleeves and get it fixed before sending the version out to any customers. I figured it was easier to fix the bug than to limp around without a working drilldown. It was amazing to me how much I have come to depend on the drilldown in my day to day financial analysis.

The customer notifications just started going out last week, and finally we can announce the new version is available to everyone!

There are two versions:

SurvivalWare Simple at $495 is for those who need to analyze a single company, using either a simple or sophisticated financial model. We think this version will appeal to business owners, entrepreneurs, and their financial helpers such as bookkeepers, accountants, and consultants.

SurvivalWare Pro at $895 is for those who need to analyze multiple locations or companies, or developers of custom financial models and reporting systems. SurvivalWare Pro is great for franchisors with hundreds of franchisees to analyze in a common format, larger enterprises looking for cost-effective reporting solutions, and entrepreneur-developers who want to provide services to these enterprises, or run their own Profit Improvement Groups.

What’s New – SurvivalWare Simple

Two Models Included – Simple and Fort Knox

SurvivalWare at its core is a financial modeling tool. The Fort Knox model is a sophisticated corporate planning model developed over many years. It allows for 10 product lines, 50 or 60 operating expense lines, and flexible projection methods for working capital so that you can hardwire assumptions, or use a Days of Sales as a forecasting technique. It also has the ability to fund cash shortfalls with a credit line.

The Simple model strives for simplicity above all else. There is just one revenue category, and 15 operating expense lines. Mapping and loading data goes a lot faster. There are fewer tabs to choose from in the DataViewer, and the number of reports available is about a third of what comes with the Fort Knox model. The Simple model still does a complete Income Statement, Balance Sheet, and Cash Flow projection – it just uses fewer lines to do it in. A side benefit to the simplicity is that the complete set of formulas for the Simple model can be exported to a spreadsheet, not just the data.

Cash Flow Focus Report

Philip Campbell came up with the idea about a year ago, and we collaborated on implementing the feature in SurvivalWare. The concept is to calculatet the Top 3 Cash Flow items each month, and present them in order of importance (i.e ranked by magnitude) along with an “All Other” category. The idea is to focus your attention on the top 3, so that you can explain what happened to the cash last month (or last quarter, last year) in a two minute conversation with a spouse or business partner.

The Cash Flow Focus Report is available as a formal report, or as a special view (with graphing, drilldown capabilities) in the DataViewer and Projection Modules.

Formula Bar

We added a formula bar to show you how each row in the model is calculated in plain English.

Even better, if a variable is calculated differently for Projected months vs. Historical months, you see a different formula based on the focus cell.

And if you have used the Forecast Tool to forecast a key assumption, the Forecast Technique is displayed in the Formula Bar.

Notes

You can enter text and associate it with a specific row and time period. The notes appear in a Notes box at the bottom of the screen as you click on any cell.

Entering a Note:

They also appear on printed reports in two different formats: the Actual vs. Budget Reports show the notes on the same line as each item on the report.

You also have the option to display the text as footnotes at the end of each page, just by clicking on the “Display Notes” check box on the report screen.

Notes are also displayed on the Trend Graphs if any of the time periods covered by the graph have notes associated with them.

Disposable Spreadsheets with formulas

This cool new feature is available for the Simple Model only. The template for the Fort Knox Model is under construction.

It warns you it’s going to take a long time.

It seems to take Forever!

This is what the spreadsheet looks like in Excel:

Row Mapping Improvements (and dozens of minor improvements)

Real Quick, some of the more notable ones:

Row Mapping Tool

“omitted only” view helps your troubleshoot mapping errors.

ability to set flex names for the model rows during the mapping process. Just “right-mouseclick” on the mapped-to row and type in a new nam

ability to deal with duplicate account numbers (but different descriptions) when mapping financial statements originating from accounting systems other than QuickBooks. SurvivalWare really shines at importing data from weird formats produced by niche accounting software.

ZIP Files – the Simple Model and Fort Knox Model now create a single zip file with all relevant company files in one place – including row maps and imported financial statements. This makes it easy to send SurvivalWare data from one person to another. The zip files are typically 3 or 4 MB or less in size, and can be sent easily as email attachments. Note: the AlphaGraphics Model has been doing this for years.

What’s New in SurvivalWare Pro

Coming soon… in Part 2 of “SurvivalWare 2014 Officially Released”

The Power Menu

]]>https://survivalware.wordpress.com/2014/06/26/survivalware-2014-officially-released/feed/1survivalwareCash Flow FocusCash Flow Focus ReportFormula Bar - HistoryFormula Bar - ProjectionFormula Bar - Forecast Techniqueblog-notes-icon-pickblog-notes-enterblog-act-bud-notesblog-notes-checkboxblog-notes-2blog-notes-barchartblog-disp-ss-iconblog-disp-ss-2blog-disp-ss-Yes-to-Createblog-disp-ss-elapsed-timeblog-disp-ss-xlsblog-power-menuSetting up SurvivalWare to Run on a Network – Part 1: Sharing Datahttps://survivalware.wordpress.com/2014/06/20/setting-up-survivalware-to-run-on-a-network-part-1-sharing-data/
https://survivalware.wordpress.com/2014/06/20/setting-up-survivalware-to-run-on-a-network-part-1-sharing-data/#commentsFri, 20 Jun 2014 21:41:41 +0000http://survivalware.wordpress.com/?p=922]]>Many customers have asked how to setup SurvivalWare to run on a network so that a common data file can be shared. This is desirable when you have a controller updating monthly data for an owner or CFO, and both want access to the data. Keeping the data on the network is nice for a single user as well. That way, the data is backed up regularly whenever the network is backed up.

This blog article shows you how to point SurvivalWare to access data in a shared folder. We will publish Part 2: Sharing custom logic and reports in a later article.

Here’s how to share SurvivalWare data on a network:

1. Set up a common data folder on the network (you may need to get a network administrator to do this for you)

2. Copy the files from the data folder on your local PC to the network folder.

NOTE: If you are using the Simple model, the data folder is called c:\survware\simple\data\. If you are running the FortKnox model, it is called c:\survware\FortKnox\data\.

Then from each PC running SurvivalWare:

3. In User Settings, set the default data path to this new network folder

4. Open your MTX file on the network by selecting File / Open Existing Company

NOTE: If two people open a SurvivalWare file at the same time, the person who saves last “wins” – i.e. any changes made by that person prior to saving will be the changes saved in that file.

Example:

The contents of the local data folder have already been copied to the S: drive on the network.

In SurvivalWare, select Company Setup from the Main Menu:

Then select User Settings:

Set the Default Data Path to the shared folder on the S: drive:

Click “Save” and you are done.

]]>https://survivalware.wordpress.com/2014/06/20/setting-up-survivalware-to-run-on-a-network-part-1-sharing-data/feed/1survivalwareCompany Setupblog-sharedata-3Default Data PathLook before you Leaphttps://survivalware.wordpress.com/2014/06/11/look-before-you-leap/
https://survivalware.wordpress.com/2014/06/11/look-before-you-leap/#commentsWed, 11 Jun 2014 11:42:09 +0000http://survivalware.wordpress.com/?p=802]]>Building a business is about constantly testing and evaluating business models to see what works best. You often have to take a leap of faith because the outcome of a major decision – such as a project – or a new marketing campaign – or an acquisition – is uncertain and unknowable. Yet you don’t do these things blindly. You have certain expectations about what will happen and when you’ll know if something is a success. “Look Before You Leap” means that you state these assumptions and expectations explicitly, and analyze what might happen from a financial standpoint.

Back of a cocktail napkin is a good place to start. But then things can get complicated as you learn and pivot and spend and invest and pivot some more. All of a sudden you have employees and leases and inventory and receivables. A portfolio of credit cards becomes a major source of working capital.

So how much is this project XYZ going to cost? Month by month?

What impact will it have on sales? Margins? Month by month? Also: what are the ranges of possible values? Best case? Worst case?

Suppose I sell licenses only and not subscriptions? How about the other way around?

What if customers take 45 days to pay?

How much money do I need?

Look before You Leap with Financial Modeling.

Financial modeling is a tool that allows you to look at different business models “on paper” first. Unless you have unlimited funds, you need to plan each move carefully. Over time things get more complex. There are many moving parts. You can’t keep track of everything in your head.

You start with the facts. This is where you are today. Cash, Inventory, Debt, recent sales. A few years of monthly financial statements if you’ve been around that long.

The financial model is a structure to accumulate this data and make sense of it. It also allows you to peek into the future

This is what SurvivalWare is all about. It is a tool to help you Look before You Leap.

The SurvivalWare Experience

You first look at historical performance to inform your decisions about what is possible going forward.

You look at trends graphically, efficiently, with push button ease.

The provided financial models show you everything you need to make assumptions about in order to do a complete financial projection (Income Statement, Balance Sheet, and Cash Flow).

You can base your assumption on history or on judgement. Or “back of the napkin” sketches. Days of market research. Coin flip. Whatever.

You look at what happens to the cash as the end result of everything else.

The secret about financial modeling is that the income statement and the balance sheet have to be in balance. Once you’ve got estimates for everything else, your cash balance is the plug. It is the end result of everything that goes on in the business. The model calculates cash for future months based on your assumptions about sales, inventory, receivables, expenses, credit cards, etc. etc.

If you decide to take this step – do it right! Call or email to arrange a free consultation. Let us help you get your data loaded, and give you some pointers on how to peek into the future financially.

custsupport@survivalware.com

703-780-2044

]]>https://survivalware.wordpress.com/2014/06/11/look-before-you-leap/feed/2survivalwareUnderstanding Your Cash Flow in 10 Minutes or Less – Webinar May 20, 2104https://survivalware.wordpress.com/2014/05/20/understanding-your-cash-flow-in-10-minutes-or-less-webinar-today-100-p-m-edt/
https://survivalware.wordpress.com/2014/05/20/understanding-your-cash-flow-in-10-minutes-or-less-webinar-today-100-p-m-edt/#respondTue, 20 May 2014 11:43:30 +0000http://survivalware.wordpress.com/?p=887]]>We just put the finishing touches on the content for today’s webinar featuring Philip Campbell and his Cash Flow Focus report. The Cash Flow Focus Report is designed to help you understand your cash flow in 10 minutes or less each month. There are still seats available – so please register if you haven’t already. A link to the recorded webinar will be sent to all who register.

In addition to Philip’s spiel, I’ll be showing off some of the features in SurvivalWare Simple, which we are officially releasing today. Another reason to register for today’s webinar at 1:00 p.m. EDT – special discounts on our Concierge QuickStart service available until June 1, 2014. You have to watch the webinar to get the discount code!

5/21/2014

Here is a link to the recorded webinar. Depending on your browser, it may download the file first (about 93 MB). If it does, you can double click on the file after it downloads to view it on your PC.